Senate Republicans rallied around a US tax overhaul bill on Friday (01/12), with Maine moderate Susan Collins announcing her support for it after obtaining agreements for several changes, giving the sweeping legislation sufficient votes to win passage.
(Reuters Photo/Aaron P. Bernstein)

Washington. Senate Republicans rallied around a US tax overhaul bill on Friday (01/12), with Maine moderate Susan Collins announcing her support for it after obtaining agreements for several changes, giving the sweeping legislation sufficient votes to win passage.

In a legislative push moving so fast that a final draft of the bill was still unavailable late in the afternoon, Republican leaders were planning for an evening vote. Approval would launch talks, likely next week, between the Senate and the House of Representatives on crafting a single bill.

That would then go to the White House, where President Donald Trump was expected to sign it into law before the end of the year. The House, which has already approved its own bill, was expected largely to defer to the Senate measure.

In Senate speeches, Democrats hammered the bill as a giveaway to corporations and the rich that will balloon the federal deficit, but the Democrats lacked the votes to block it.

Six Republican senators whose commitments had been in doubt announced on Friday they would back the bill: Collins, Steve Daines, Ron Johnson, Jeff Flake, James Lankford and Jerry Moran.

Republicans hold a 52-48 majority in the Senate.

Senator Bob Corker, a leading fiscal hawk who pledged early to oppose any bill that expanded the federal deficit, stood out as the lone remaining Republican dissenter. As drafted, the bill was projected to add $1 trillion in 10 years to the $20 trillion national debt, even after counting its boost to the economy.

"I am not able to cast aside my fiscal concerns and vote for legislation that ... could deepen the debt burden on future generations," said Corker, who is not running for re-election.

Key Changes

While a Senate summary was unavailable, lobbyists and lawmakers identified some of the last-minute changes to the bill that could be added.

One was to make state and local property tax deductible up to $10,000, mirroring the House bill. The Senate previously had proposed entirely ending state and local tax deductibility.

Another was to put a five-year limit on allowing businesses to immediately write off the full value of new capital investments. That would phase out over three years starting in year six, rather than be permanent as initially proposed.

Under another change, the alternative minimum tax (AMT), both for individuals and corporations, would not be repealed in full. Instead, the individual AMT would be adjusted and the corporate AMT would be maintained as is, lobbyists said.

In another change, they said, the proposed tax rates for a one-time levy on foreign profits held abroad by multinational corporations were harmonized with the House-proposed levels.

The final verdict was still unclear on a proposed deep cut in the corporate income tax rate to 20 percent from 35 percent.

Senate Democratic leader Chuck Schumer said in a statement, "This bill directs the lion’s share of its benefits to those at the very top, the already wealthy and the already powerful. ... The hole it blows in the deficit will – make no mistake – endanger Social Security, Medicare and Medicaid."

Praise from Trump

Trump, still looking for the first major legislative accomplishment of his 10-month-old presidency, praised fellow Republicans in Congress for their work in a Friday morning tweet.

Passage of the Republican bill would represent the biggest overhaul of the US tax system since the 1980s. Its success is seen by Republicans as crucial to their hopes of retaining control of Congress in the November 2018 elections.

Daines and Johnson announced their support for the bill on Friday after winning more tax relief for non-corporate pass-through businesses. These include partnerships and other companies not organized as public corporations, encompassing most American business enterprises from mom-and-pop concerns to large financial and real estate organizations.

The bill now features a 23 percent tax deduction for such business owners, up from the original 17.4 percent, according to statements from both senators.

In a statement, Flake said he had secured two objectives: eliminating an $85 billion "expensing budget gimmick" in the measure and winning a commitment to work with him on fair and permanent protections for illegal immigrants who came to the United States as children.

Collins said she had won the agreement to make state and local property taxes be deductible up to $10,000. She also pushed for and obtained commitments to take steps minimizing the impact on older and sicker Americans of a provision of the bill that would repeal part of the Obamacare healthcare law.